"It will take a rally of monumental proportions to save the penis of John McAfee" - Zerohedge, 2017

Monday, December 21, 2015

Sorry for the lack of news

Well, I was pissed off cos I needed a 95 on the exam to get an A+ in polisci. But then I sat down at the table, opened it up, and...

I'd studied the Washington Consensus, in fact I've read Stiglitz's Globalization and its Discontents, andwouldn't you know it that was one of the essay questions.

The other was on critical theory, and dammit all wouldn't you know I've already studied everything from constructionism to Foucault in detail.

So it's quite possible I got a perfect score on that exam. Then again, the TAs seem to not want to give a mark higher than 90 to anyone who demonstrably knows even more than them on the topic. "Gee, you explained the central thesis of post-modernism better than any of our polisci profs can, because you actually read 1000 pages of Foucault and Lyotard, but we're going to dock 5% because your paragraphs are too short."

Oh well. All that's left is a stats exam on Tuesday, and I just can't be arsed to study for it. So here's some of the news that's been piling up:

Yes, even though the Fed has an official 2 percent inflation target revealed preferences indicate the real force shaping Fed policy has been a 1-2 percent inflation target corridor over the past seven years. Once you understand this point all other Fed mysteries begin to clear up.

Well, they must not be all that concerned about zeroing the inflation expectations term if they're pursuing a 1%-2% corridor instead of accepting temporary overshoots of 2%. Personally I think it's awful gutsy to tiptoe along the knife-edge of deflation this way: maybe they're worried that Summers' "secular stagnation" could progress into stagflation unless they nail inflation down at zero?

The question is, what does the next Fed do for an encore 10 years from now? Nail down a 0.2%-0.4% corridor? At some point Feds have to accept higher inflation than was around before.